Labour productivity in Sri Lanka has risen in 1997, but experts say more gains in productivity are needed if Sri Lanka is to remain competitive in world markets.
The value of output per employee had risen by 12.2 per cent in the first half of 1997, indicating an improvement in labour productivity of 4 per cent, according to Central Bank data. Labour productivity per man hour used had increased by 3.8 per cent.
Because labour productivity is defined as the gross domestic product, divided by the employed workforce, experts warn that overall national increases in labour productivity may be recorded simply because the value of goods and services go up. In the tea industry for example because of high prices labour productivity will be shown to have risen because of high tea prices and not necessarily because workers have increased volume output.
However during the past few years, there had been startling increases in productivity in at least some companies, including the plantations sector.
The Industries Ministry has also embarked on a national productivity drive, raising awareness of productivity around the country. "Increasing productivity does not mean that workers work harder, just that they work more efficiently eliminating unnecessary movements," says Sunil Wijesinghe, an expert on Japanese productivity improvement techniques.
The 'working smarter not harder' concept is one of the key foundations on which productivity gains are build. The science of ergonomics for example helps workers improve output by having tools and products within easy reach and machines and equipment that are designed to fit the movements and the reach of the human body.
Tea bushes for example have to be pruned below chest high to enable pluckers to work efficiently.
Some of the privatised plantations companies like Talawakele Plantations which have started practising modern management techniques have recorded substantial increases in productivity, Mr. Wijesinghe says.
The plantations sector in particular is now facing shortages of labour and the need for labour productivity gains would become critical in the coming years.
The Ceylon Tobacco Company ,for example, though producing a demerit good in economic terms, has been one of the biggest success stories in productivity improvement which even enabled it to bag the national productivity award.
However, Sri Lanka would have to substantially boost productivity in all factors of production in 1998, if the country is to remain competitive in the international arena, in the face of currency devaluation in competing Asian producers, analysts say.
Like developed countries Sri Lanka would also have to become highly capital intensive to be more productive, they say.
The last phase of the plantation privatisation programme will kick off this year, with the sale of 51 per cent equity of Elkaduwa Plantations in January and at least another two public offers.
"Everything was on track to privatise Elkaduwa Plantations starting January, but the recent bomb blast has disrupted activities in the CSE and delayed the process," a PERC official said. Elkaduwa will be followed by the sale of 51 per cent equity of Pussellawa and Thalawakale plantations, which will bring the total privatised estates to 21.
Initial Public Offerings of two more plantations Hapugastenne and Madulsima are also scheduled for January. So far the privatisation process on eight plantations have been completed. Fifty one per cent equity has been sold and 20 per cent has been issued to the public for Agalawatte Plantations, Bogawantalawa Plantations, Horana Plantations, Kegalle Plantations, Kelani Valley Plantations, Kotagala Plantations, Maskeliya Plantations, and Watawala Plantations.
The government retained the remaining 19 per cent. Subsequently, PERC sold its stake in Kotagala, Kegalle, Agalawatte and Horana on the stock exchange.
The problematic privatisation of the remaining plantations, Wayamba and Angunuthunga coconut plantations will be finalised when the technical evaluation reports are ready, sources said. The coconut plantations are leftovers from the first stage of plantations privatizations where the managing agents were given the first refusal for the controlling stake because they were managed efficiently.
Meanwhile, the 10 per cent worker shares due to be handed over this week has also been delayed. The authorities are still undecided as to whether to gift shares of all 23 companies or limit it to the companies privatised so far, plantation ministry sources said.
The Sri Lankan tea industry has been cruising well during the past few months, yields have improved substantially, and prices are on the rise. Tea industry sources say, a shortage of tea in Kenya has meant Ceylon tea could fetch high prices in the world market.
The CIS countries have also stepped up their tea purchases and have become the biggest buyers of Ceylon tea.
As the New Year rolls in, it brings with it the calendar and diary epidemic, with the bug spreading like wildfire throughout the country.
This is probably the only time in the year that both business executives and ordinary folk alike go crazy over something as trivial like a calendar or a diary. But many complain that there has been a decline of calendars and diaries over the last few years.
Business establishments spend millions each year on diaries and calendars to retain the goodwill of customers and valued business partners.
Aitken Spence Printers says the demand for both items has not decreased this year. The company has got a number of inquiries and is unable to cope with the demand. "Our regular work prevents us from taking on additional orders," a company official said.
However, other printers lamented that though there were more inquiries compared to last year, only a few orders were received this year. Competition among the printing trade has kept the price of calendars very much the same as last year, though costs have gone up.
In addition to advertising, companies have a separate budget for other promotional activities. "A company usually spends more than half of its promotional budget to print complimentaries like diaries and calendars. But since printing them has become a tradition, despite poor profits, many companies have scaled down the quantities ordered," one printing executive said.
Competition from pavement hawkers too has driven prices down further. A diary costing Rs. 150 is sold for as little as Rs. 80 by pavement hawkers, who get their supplies from India at a much cheaper rate. Some companies import them from Singapore and get local printers to add the company name.
Calendars don't come cheap either. The price of a 12-page calendar using poster paper ranges from Rs. 23-40, depending on the quantity. If a calendar uses quality art paper, including a well known model, the cost would be around Rs. 50-75, printers said. "The price differs on the popularity of the model," they said.
Internationally, some calendars have even become collectors' items. The Pirelli calendar which is printed in limited quantities and uses pictures of supermodels by renowned photographers has become one of the most sought after company calendars in the world.
The final proposals to bail out the ailing domestic textile industry from debt crises are to be submitted to the cabinet next week by the Treasury, The Sunday Times Business learns.
Weavers who have been hard hit by the recent duty waiver on textiles, were asked to submit a report on the financial status of their companies to the Treasury last month. The banks too were asked to submit a similar report.
"The survey has been completed with 145 companies responding. The total debt has been estimated to be about Rs. 3.5 bn," a Treasury officials said. "The banks will give a 'bankable proposal' to look after the profitable textile ventures. Once these reports are received, the government would draw up a strategy for the future of the industry," an official said.
The government is also looking at the possibility of requesting the Labour Department to make concessions towards textile manufacturers who have fallen back on their EPF/ETF payments. "Some manufacturers have not paid EPF/ETF for nearly two years," Treasury sources said. Even utility suppliers like the Electricity Board have been asked to make concessions towards the manufacturers' monthly bills officials said. The industry is said to employ around 14,000 people at present. However other estimates put the figure at twice the amount.
A three-year collective agreement, hailed as a major victory for the working class in the plantation sector, was signed last week between two leading trade unions representing plantation staff interests and the Employers' Federation of Ceylon.
The agreement signed last Monday between the Ceylon Estates Staff's Union (CESU), the National Estate Services Union (NESU) and the Employers' Federation on behalf of the major plantation management companies is expected to benefit 20,000 estate staff workers in the supervisory, technical, medical and clerical grades.
Besides a salary increase of 25 percent which will be deemed effective from October 1, 1997, the unions have scored on a number of other concessions and ensured greater job security for estate staff.
Apart from the 12,000 members of the CESU and the 400 of the NESU, about 7,600 other estate staff are expected to be beneficiaries of the agreement which will be valid until October 2000.
Besides the 21 major tea, rubber and oil palm plantation companies that were handed over to private management during 1992, the five plantation companies that are in the process of changing over to private management will also be bound by the agreement.
President of the CESU, Keerthi Mannapperuma described the agreement as a historical one as it was the first time that estate staff had been conceded such a significant salary increase, besides other important concessions.
He noted that enhanced earnings from EPF, ETF and the cost of living allownce as a result of the agreement would amount to a 32 percent increment in the total monthly wage of estate staff.
The agreement also provides for greater job security due to the long-drawn out procedures entailed in dismissing staff employees such as a preliminary inquiry within seven days and serving a charge sheet within 14 days.
Before this, management and supervisory officials had the right of terminating employment without any inquiries.
It has also been provided that the union may represent any of its members at an inquiry.
According to Mr. Mannapperuma, the new provisions will greatly alleviate the need for seeking recourse to the Labour Tribunal.
The Death Grant paid to relatives of deceased staff has been increased from Rs. 5,000 to Rs. 10,000.
A number o redesignations have also taken place as a result of the agreement.
For example, Special Grade Chief Clerks have been designated as Administrative Officers while Welfare Supervisors will henceforth be known as Welfare Officers.
The CESU, an avowedly non-political trade union which claims to represent over 90 percent of all estate staff working in the major plantations, was instrumental in negotiating the terms of the agreement which resulted from a proposal put forward by the union in November 1996.
This is the 7th collective agreement signed between the CESU and plantation management. The last collective agreement was signed in 1993.
And more about cricketers doing promotional stunts.
One particular brand of mosquito coil, launched recently, was on the lookout for a cricekter to say a few words o endorsement on TV. The champion master blaster was approched but his fee was too high. The other dusky batting hero was then approached but his fee was more or less on the same level with the blaster.
Then they asked the leading pacemen to do the job and he obliged, for a lesser fee of course.
So, when you next see the 'coil' ad in between the cricket commentaries, remember there is a story behind that too..
The business empire which forged a brave new world in the late seventies and still remains a major business house was in for a rude shock recently.
Posters appeared overnight in the premises of the business house, threatening trade union action.
The management is concerned, but the carrot rather than the stick is better to deal with the situation, they have decided, company insiders say.
So, there should be pay hikes for everyone in the new year...
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